US Limited Duration Strategy

US Limited Duration Strategy

US Limited Duration Strategy


The US Limited Duration Strategy seeks current income, preservation of principal and liquidity by investing in a diversified portfolio of securities issued by the U.S. Government and its agencies. To help achieve this objective, the team invests in U.S. Government, corporate bonds, asset-backed and mortgage-backed securities with maturities of less than five years.

Investment Approach

The team employs a value-based investment philosophy. The team believes that significant inefficiencies can exist in the fixed income markets and, as value managers, they look for situations where the market’s implied forecasts are extreme and position client portfolios to capture the value inherent in these situations. The team seeks to add value and exploit inefficiencies across eligible sectors by combining traditional analysis with innovative technology.

Integrated Investment Approach

The team’s investment approach integrates strong qualitative analysis with robust quantitative valuation tools at every stage of the investment process, providing a robust credit management process.

Research with Portfolio Management

Strategic investment decisions are made by a team of experienced investors who continually conduct ongoing research to be at the forefront of fixed income research and are thought leaders in this field. Opinions from all members of the team are debated to ensure that portfolios reflect the team’s best ideas.

Global Research

An emphasis on a team-based approach to research and investment allows investors to benefit from the combined insight and expertise of MSIM’s global fixed income team. Approximately 80 percent of MSIM’s research is generated in-house, and this is supplemented by Morgan Stanley sell-side and third party research.

Investment Process
Macro Analysis:

The investment team employs a top-down approach to asset class allocation. The allocation decision starts with macroeconomic analysis. They believe that market participants often misjudge the likely paths of monetary policy, inflation, and credit quality—key paths that, for the most part, are aligned with the business cycle or inflation cycle. The team employs fundamental and quantitative analyses to identify and exploit any mispricing in an effort to generate superior returns over the long term. Mispricing often occurs when market expectations are excessive and unlikely to be realized.

Yield-Curve Analysis:

The team utilizes a proprietary term structure model that imputes the market expectations of inflation and monetary policy from market prices. These forecasts are compared to the likely range of outcomes—taking into account fiscal policy, monetary policy, general business conditions and historical precedent—to determine yield-curve positioning.

Valuation Analysis:

The risk parameters established by the portfolio management team guide the portfolio managers in implementing security selection decisions. To help attain these targets, the portfolio managers refer to the value opportunities already identified by the various research teams in making their security selection decisions. Portfolio managers have the ultimate responsibility for fulfilling portfolio targets while simultaneously ensuring that all selected securities are compliant with the investment guidelines.

Portfolio Construction:

The team's research focuses on identifying value in as many opportunities as possible. Portfolios are built security by security with vigorous attention paid to assessing and comparing a wide variety of possible investments.

Portfolio Managers  
Neil Stone
Neil Stone
Head of U.S. Custom Multi-Sector
38 years industry experience
Matthew Dunning
Matthew C. Dunning
Executive Director
34 years industry experience
Eric Jesionowski
Eric Jesionowski
Executive Director
28 years industry experience








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